Ask the Advisor: What Are Key Factors Impacting the Due Diligence Process as a Seller in Today’s Market? 

By Joe Basilico, CPA, Shareholder, Transaction Advisory Services

Today’s M&A environment has made the due diligence process a complex situation to manage with deal multiples continuing to rise and business models constantly evolving. As a result, buyers are looking beyond the seller’s financial data in the due diligence phase and assessing areas such as an organization’s information technology capabilities, cybersecurity risks, human resources, company culture, and tax and regulatory compliance to determine deal value. 

From a financial perspective, sellers should be prepared to supply accurate and reliable information supporting their forecasted growth. Beyond the numbers, make sure your organization is prepared to successfully support an integrated due diligence process. Technology and cybersecurity measures are being heavily weighed right now, so have documentation ready to highlight how the company is protected both financially and operationally, how often these infrastructures are evaluated and associated costs. With a turbulent job market, buyers will also want to know how the seller has retained its key employees, whether roles and responsibilities are scalable, and how benefits and compensation have been managed. On the compliance side, be sure your business can support its regulatory and tax compliance efforts.  

Doeren Mayhew’s Transaction Advisory Group works closely with businesses to conduct due diligence services and help them prepare for a successful M&A outcome. For more information on sell-side due diligence, contact our transaction advisors today.